The way millions of Britons tap to pay for goods and services is poised for a significant shift. The Financial Conduct Authority (FCA) has confirmed new rules that will grant banks and payment providers the power to set their own contactless payment thresholds, moving away from the current universal £100 limit.
What the New FCA Rules Mean for Shoppers
From 19 March, financial firms that can demonstrate robust anti-fraud systems will gain autonomy to decide their contactless transaction limits. This regulatory change is designed to allow the market to respond more dynamically to factors like rising inflation, evolving consumer habits, and advancements in payment technology.
Importantly, the core consumer protections against unauthorised transactions will remain firmly in place. If a card is lost or stolen, customers will not be held liable for fraudulent contactless payments. Furthermore, the FCA is actively encouraging firms to offer customers tools to personalise their own limits or even disable contactless functionality entirely if they wish.
Beyond the Single Transaction Limit
The regulatory update extends beyond the per-transaction cap. Providers will also have flexibility to review the cumulative contactless limit. Currently, after a total spend of £300 or five consecutive contactless transactions, customers must verify their identity with a PIN. This security check point may now be adjusted by individual firms based on their risk assessments.
This move represents a departure from the one-size-fits-all approach, acknowledging that spending power and security needs can vary greatly between consumers.
Industry Reaction and the Path Ahead
Despite the new flexibility, a major shift in limits is not expected overnight. Key industry body UK Finance has indicated that it does not foresee an immediate widespread move away from the familiar £100 ceiling. The organisation emphasised that any changes will be carefully considered, with security and maintaining strong fraud controls remaining the paramount concern for its members.
The development follows notable public moments highlighting the technology's ubiquity, such as the recent awkward clip where former Prime Minister Rishi Sunak struggled with a contactless payment terminal. The new rules aim to create a system that is both more convenient for everyday use and adaptable for the future, putting more choice in the hands of both providers and their customers.
